Friends Fiduciary Files Drug Patent and Access Proposal at AbbVieApril 26, 2023
Friends Fiduciary filed a shareholder proposal at AbbVie (ABBV) to raise investor concerns around the pharmaceutical company’s use of extended patent exclusivity on its products. More specifically, investors are asking the company to establish and report on a process by which the impact of exclusivities on patient access would be considered in deciding whether to apply for secondary and tertiary patents (patents applied for after the main active ingredient/molecule patent). While these patents relate to the product, they often don’t improve the efficacy of drugs but rather often have the goal of extending the amount of time a drug is under patent protection, thereby preventing the introduction of generic drugs. These barriers to generics ultimately allow pharmaceutical companies to keep their prices high without competition. This extended exclusivity gained from secondary and tertiary patents not only delays generic entry, but also limits patient access, and saddles the health care system with unsustainable costs. These impacts create potential regulatory and reputational risk for the company which would negatively impact long-term shareholder value.
FFC explains our concerns and the business case for supporting this proposal at AbbVie in a letter to shareholders.
The institutional proxy service, ISS, has recommended support for the proposal. Here is their analysis.